Republican commissioners continue to question where the money will come from

The U.S. Federal Communications Commission has voted to spend US$2 billion over the next two years on improving Wi-Fi networks at schools and libraries, despite questions from Republican commissioners about the source of those funds.

The FCC, in a 3-2 party-line vote Friday, approved a plan to revamp the 17-year-old E-Rate program, which pays for telecom services for schools and libraries, by phasing out funding for voice service, Web hosting and paging services, and redirecting money to Wi-Fi. FCC Chairman Tom Wheeler had proposed a $5 billion budget for Wi-Fi, but Republican commissioners and some lawmakers had questioned where the money would come from.

Still, the E-Rate revamp approved Friday contemplates a $1 billion-a-year target for Wi-Fi projects "year after year," Wheeler said. The commitment of $1 billion for Wi-Fi in 2015 means that "10 million students are going to experience new and better opportunities," he added.

In past years, the money available for E-Rate Wi-Fi projects varied from year to year, with no money available in the past year, FCC officials have said. The new approach would give schools and libraries a better idea of what money will be available, they said.

But the budget doesn't make sense, with only about $600 million in reserves in the E-Rate program, said Republican Commissioner Ajit Pai. "The numbers for the Wi-Fi didn't add up," he said. "Where will that money come from?"

The phaseout of obsolete telecom services in the E-Rate program will pay for the Wi-Fi program, said Jon Wilkins, the FCC's acting managing director. The cost savings from phasing out voice and other old services will amount to $350 million in 2015 and will rise to $950 million in the fifth year of the program, he said.

Pai and fellow Republican Commissioner Michael O'Rielly also criticized the E-Rate revamp as missing an opportunity to streamline the $2.4-billion-a-year program and take away some of the complexity for schools and libraries applying for funds. The program's 17-page application scares off small schools and libraries that can't afford to hire outside consultants to fill out paperwork, Pai said.

The FCC promised schools, teachers and students "E-Rate modernization," Pai said. "They need real reform. What does the FCC give them today? The status quo."

O'Rielly called on the FCC to develop a long-term plan for the E-Rate budget, paid for with fees on consumer telephone bills. He predicted the plan would lead to higher phone taxes.

"It always seems to be easier for some people to take more money from American people via taxes and fees, rather than do the hard work," he said. "If more money is justified for E-Rate, let's dig in and find offsets, not stick it to hardworking poor and middle-class Americans."

Several groups praised the FCC's E-Rate plan. Wheeler's plan uses E-Rate funding "in a balanced and integrated way to deliver true high speed Internet service to schools and libraries," David Cohen, Comcast's executive vice president, wrote in a blog post.

"The ultimate goal that everyone shares is to improve educational achievement," Cohen wrote. "And connected classrooms and libraries -- and just as importantly, homes -- are essential for student success in the 21st century."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.